Schiff Hardin’s L&E Group rings in the new year with our annual reporting on certain employment-related legislative developments slated to take effect in 2017 on the federal level and in Illinois, California, New York, Washington, D.C., Georgia, Michigan, and Texas.
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On September 25, 2016, Governor Brown signed into law SB 1241, which imposes new restrictions on employers’ use of choice of law, choice of venue, and choice of forum provisions in agreements with California-based employees.
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A new Illinois law soon will render invalid non-compete agreements with most lower-level employees. Governor Rauner has signed into law the Illinois Freedom to Work Act (IFWA), 5 ILCS 140/1, et. seq., which prohibits private employers from entering into non-compete agreements with “low-wage employees,” defined as $13.00 per hour or less. The law is designed to prevent abuses of non-competes against employees who pose no real threat to their employer. The IFWA applies to non-compete agreements entered into on or after January 1, 2017, the effective date of the IFWA.
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California’s Fair Employment and Housing Act (“FEHA”) prohibits discrimination, retaliation, and harassment in the workplace. Recent amendments to FEHA’s implementing regulations issued by the California Department of Fair Employment and Housing include significant new obligations for employers, and clarify a range of important issues.
The amendments take effect on April 1, 2016. The full text of the amended regulations can be found here. We summarize below some of the more significant provisions.
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There’s no dissent here. Justice Scalia’s unexpected passing presents a potential blow to employers in two ways. First, the Supreme Court lost one of its most staunchly conservative justices, who often sided with management in key employment-related decisions. Second, his death has left the Supreme Court without a clear majority and no easy mechanism to reverse appellate court decisions favoring employees. With the 2016 elections nearly eight months away, and the likelihood of a replacement shrinking with each news cycle, 4-4 decisions are probably the new norm until a replacement is confirmed after the election.
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California’s new Fair Pay Act amends existing law to enact what is widely being considered as the most stringent equal pay law in the country. The Fair Pay Act will amend existing law in a number of significant ways, making it easier for employees to bring equal pay suits against their employers. Under previous law, an employee had to show that he or she was being paid less than an opposite sex colleague who was performing “equal work.” The new law will allow employees to compare their pay with colleagues who hold different, but “similar” positions, regardless of job title. It goes into effect January 1, 2016.
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Part 1 of a 3-Part Series
Many years ago, employers and management counsel across the country cheered the birth of mandatory arbitration provisions in employment agreements. For instance, when the U.S. Supreme Court decided Perry v. Thomas, it determined that because there is a clear federal policy favoring arbitration, an arbitration clause would be upheld despite a state law requiring a judicial forum for the employment claims at issue in the dispute. 482 U.S. 483, 491 (1987). And when the same Court decided Gilmer v. Interstate/Johnson Lane Corp. a few years later, it held that an inequality in bargaining power is not a sufficient reason to hold arbitration clauses in employment agreements unenforceable. 500 U.S. 20, 33 (1991). Arbitration was supposed to be the magic bean that would grow into a fortress of beanstalks protecting America’s corporations from time-consuming, energy-sucking litigation. And even better, it was supposed to be inexpensive and generally designed to give employers the upper hand. After all, an arbitrator would never give a plaintiff as much as a jury of his (not ‘our’) peers, right?
Well, it was a good thought – and it was fun while it lasted.
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Only 12 days after California’s paid sick leave law took effect (AB 1522), the legislature amended the law to address some of its more challenging implementation aspects for employers. The significant amendments include:
Alternate Accrual Method
AB 1522 required that employees accrue paid sick leave at a rate of one hour for every 30 hours worked. The amendments permit employers to use a different accrual method as long as hours accrue on a regular basis and employees accrue at least 24 hours of sick time or other paid time off by their 120th day of employment each calendar year (or other 12-month basis).
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Effective July 1, 2015, California will join Connecticut and Massachusetts[1] in providing mandatory paid sick leave for employees who work in the state at least 30 days within a year, and who are employed for at least 90 days. Under the new law, employees will accrue at least 1 hour of paid leave for every 30 hours worked, for approximately 8 days a year for full-time employees. However, the new law allows an employer to limit the amount of paid sick leave its employees may take in one year to 24 hours (3 days). Employees must be allowed to carry over unused sick leave from one year to the next, but an employer can cap the amount of sick leave an employee may accrue at 48 hours (6 days). This law applies to all California employees regardless of whether they are part-time or temporary employees, with limited exceptions. Even small employers are subject to the new rules.
AB 1522 requires employees be allowed to take paid sick leave for either their own health condition or the health condition of a family member, including preventative treatment. Family members include the employee’s parent, child, spouse, registered domestic partner, grandparent, grandchild, and sibling. Employers are not required to increase the number of paid leave days allowed for in existing policies if they provide for equal benefits as the new law.
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On Monday, employers were provided guidance on an issue of increasing interest: whether an employee’s off-duty marijuana use that is lawful under state law can serve as grounds for termination. In Coats v. Dish Network, Case No. 13SC394, the Colorado Supreme Court held that employers may fire employees who test positive for marijuana, even if those employees are registered and lawful medical marijuana users under state law.
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